The sleek and stylish new Palm Treo Pro due out in September appeared to be a saving grace for quickly falling company. But early reviews from Wired and Gizmodo suggest that the appeal may end at appearance. Fortunately Palm is just using the Treo Pro to “stay afloat” while it prepares a miracle phone in 2009 with a completely new OS. Could it be Android?

Google’s Andy Rubin has said repeatedly that one crucially important aspect of Android is that it could save device manufacturer’s up to 20% – savings that can be passed onto consumers. Non-coincidentally, analysts are saying Palm’s problem is their pricing structure: “The iPhone went down to $200; the Samsung Instinct went down to $230,” said Tero Kuittinen of Global Crown Capital, “This is no longer the same phone market we had a year ago.”

ONE year ago… and we’re only TWO years removed from the days that Palm was the American leader in smart phone sales. They have since been replaced by both Research In Motion (BlackBerry) and HTC with Apple and the iPhone right on their heels.

So what could help Palm contend on price immediately? Android.

But price is just one factor. Peter Hoddie – President of mobile software developement company, Kinoma – added,”Operating systems don’t matter to most customers. What matters to them is what they can do. … Why do [people] love iPhone? They love the apps. Why don’t people love Windows Mobile? It’s in fact an amazing operating system … but the apps on top of it? Not so inspired.”

For those not aware, the Palm Treo Pro is actually running Windows Mobile instead of Palm’s proprietary Operating System and the device is set to be manufactured by HTC. Considering this, it doesn’t seem inconceivable that Palm would release an Android enabled phone in 2009. In fact, it would be an incredibly smart move.

It should be noted that Palm recently hired Jon Rubinstein, a former Apple engineer instrumental to the iPod, as its head of product development. And according to the Wired article the ONE thing we know about Palm’s miracle phone for 2009 is that, “it will feature an entirely new platform and new hardware.”

Given all the details, one could easily see how a strategy devised around making the most beautiful and functional handset ever… running Android.

Part of Palm’s storied past has been their proprietary Palm OS and some will argue that there is no way they’ll ditch this competitive advantage for Android. But how long can they keep playing catch up in so many ways… cost, design, 3rd party apps, etc… with so many options out there, they are quickly dropping on the consumer priority list.

Perhaps Palm’s flagship device of 2009 will feature an all new Palm OS. In fact, its more than likely given the nature of corporate egos. But all the evidence says that Palm SHOULD be thinking about Android and FAST. So the question remains… will/when will a Palm sport Android?

What is REALLY funny is that in November of 2007 when Android was first announced, Engadget called for Palm to Assimilate or Die. Palm is NOT in the Open Handset Alliance which is somewhat shocking considering their dire situation and the pieces that fit like a puzzle:

“Suddenly all Palm has to do is develop its own UI for Android, give the system the old Palm fit n’ finish, maybe whip up an emulator layer for previous Palm OS apps, and they instantly reap the all benefits they’ve been after chasing the Palm OS-unicorn. Palm’s most desperate hour could be over; suddenly there’s a light at the end of Palm’s tunnel. In fact, if we didn’t know any better, we’d even fancy Android was created by Andy Rubin and Google to help Palm out — it’s just too perfect a coincidence.”

But Engadget received a written response from Palm, pretty much denying that they would adopt another OS and instead will work on their own OS and incorporate Google services. Endgadget’s Paul Miller than joked that he didn’t want to wait for 1.5 years to be proved wrong… and what do you know… amidst delays of the new Palm OS we’ll be coming up on 1.5 years at the end of Q1 2009 or so, won’t we?

Its that time, Palm. Assimilate or die.

[This post was inspired by Wired.com article from Brian X. Chen found here and includes many of the facts and quotes reported there. Thanks Brian… great article.]

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